Huge investments needed for energy security: International Energy Agency - 412 million people do not have access to electricity in India

Over 20 per cent of the global population, or 1.4 billion people, lack access to electricity. Some 40 per cent of the global population, or 2.7 billion people, rely today on the traditional use of biomass for cooking. These are some of the major findings released by the International Energy Agency (IEA) in a new report ‘Ending Energy Poverty - How to Make Modern Energy Access Universal,' a special excerpt of IEA World Energy Outlook 2010.

HINDRANCE

The report is released in cooperation with UNDP and UNIDO. Lack of access to modern energy services is a serious hindrance to the economic and social development and must be overcome if the UN millennium development goals (MDGs) are to be achieved, the report points out, warning that without additional dedicated policies, the problems would persist and even deepen in the longer term. This joint report investigates the energy-access challenge and estimates the number of people who need to gain access to modern energy services and the scale of the investments required to achieve the goal of universal access to modern energy services by 2030.

It also discusses the implications of meeting such a target for the global energy market, the environment and health. The full WEO-2010 will be released on November 9.

Indian perspective

Referring to India, the report says energy poverty affects many Indians, even though the number of households with access to electricity has risen over the past couple of decades. While access to electricity is still far from universal (there are still some 412 million people without electricity), availability of modern cooking fuels and technology is still limited, especially in rural areas. It is well known that energy consumption fuels economic growth and high economic growth rate will propel consumption of energy products higher. It is estimated that at an investment cost of $41 a person ( Rs 2,000 per person) it would cost $17 billion ( Rs 80,000 crore) to connect all those without electricity today to the central grid. Given the high cost of expanding the grid network, diesel generators, mini-hydro, wind turbine, biomass gasifiers and photovoltaics, or a combination of these, could be more economical.

LPG, kerosene

LPG and kerosene subsidies have been ineffective in improving the welfare of the poor, particularly in rural areas, the report observes , adding the current subsidy scheme benefits richer households more, mainly in urban areas, and has for the most part failed to shift fuel consumption patterns away from the biomass in poor households. It is estimated that 40 per cent of subsidies for LPG and kerosene go to the richest 7 per cent of the population.